Quarterly Report June 30, 2017

Quarterly Report June 30, 2017 MANAGEMENT'S DISCUSSION AND ANALYSIS The following commentary reviews the consolidated financial condition and consolidated results of operations of Farm Credit Mid-America, ACA and its subsidiaries Farm Credit Mid-America, FLCA and Farm Credit Mid-America, PCA. This discussion should be read in conjunction with both the unaudited consolidated financial information and related notes included in this Quarterly Report as well as Management s Discussion and Analysis included in our Annual Report for the year ended December 31, 2016 (2016 Annual Report). Due to the nature of our financial relationship with AgriBank, FCB (AgriBank), the financial condition and results of operations of AgriBank materially impact our members' investment. To request free copies of the AgriBank or the AgriBank District financial reports or additional copies of our report, contact us at: Farm Credit Mid-America, ACA AgriBank, FCB P.O. Box 34390 30 East 7 th Street, Suite 1600 Louisville, KY 40232 St. Paul, MN 55101 (800) 444-FARM (651) 282-8800 www.e-farmcredit.com www.agribank.com financialreporting@agribank.com FORWARD-LOOKING INFORMATION Any forward-looking statements in this Quarterly Report are based on current expectations and are subject to uncertainty and changes in circumstances. Actual results may differ materially from expectations due to a number of risks and uncertainties. More information about these risks and uncertainties is contained in our 2016 Annual Report. We undertake no duty to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. AGRICULTURAL AND ECONOMIC CONDITIONS Agriculture commodity prices remain below 7-10 year averages resulting in tight and often negative margins for crop and livestock producers. Input prices are declining but not sufficiently to offset the decline in income from low commodity prices. The overall economy remains sound and little changed from 2016 with modest job and wage growth. LOAN PORTFOLIO Loan Portfolio Total loans were $20.3 billion at June 30, 2017, a decrease of $176.7 million from December 31, 2016. The decrease was primarily related to decreased originations and draws on Production and Intermediate term loans and Real Estate Mortgage loans. Portfolio Credit Quality The credit quality of our portfolio declined from December 31, 2016. Adversely classified loans increased to 3.9% of the portfolio at June 30, 2017, from 3.5% of the portfolio at December 31, 2016. The increase in adversely classified loans was a reflection of the tight margins for most agriculture producers. Adversely classified loans are loans we have identified as showing some credit weakness outside our credit standards. We have considered portfolio credit quality in assessing the reasonableness of our allowance for loan losses. 1

Risk Assets Components of Risk Assets (dollars in thousands) June 30 December 31 As of: 2017 2016 Loans: Non-accrual $ 333,076 $ 246,456 Accruing restructured 17,694 17,079 Accruing loans 90 days or more past due 1,820 283 Total risk loans 352,590 263,818 Other property owned 4,639 6,483 Total risk assets $ 357,229 $ 270,301 Total risk loans as a percentage of total loans 1.7% 1.3% Non-accrual loans as a percentage of total loans 1.6% 1.2% Current non-accrual loans as a percentage of total non-accrual loans 65.3% 68.7% Total delinquencies as a percentage of total loans 0.9% 0.6% Note: Accruing loans include accrued interest receivable. Our risk assets increased from December 31, 2016, primarily due to the challenging agriculture environment and declining net farm income, but remained at acceptable levels. Despite the increase in risk assets, total risk loans as a percentage of total loans were well within our prudent risk management parameters. The increase in non-accrual loans was primarily due to increases in real estate mortgage and production and intermediate term non-accrual loans, caused by continued stress for crop and livestock producers. Non-accrual loans remained at an acceptable level at June 30, 2017, and December 31, 2016. Our accounting policy requires accruing loans past due 90 days or more to be transferred into non-accrual status unless adequately secured and a plan is in place to collect past due amounts. Based on our analysis, all accruing loans 90 days or more past due were eligible to remain in accruing status. Allowance for Loan Losses The allowance for loan losses is an estimate of losses on loans in our portfolio as of the financial statement date. We determine the appropriate level of allowance for loan losses based on periodic evaluation of factors such as loan loss history, estimated probability of default, estimated loss severity, portfolio quality, and current economic and environmental conditions. Allowance Coverage Ratios June 30 December 31 As of: 2017 2016 Allowance as a percentage of: Loans 0.6% 0.5% Non-accrual loans 34.3% 38.4% Total risk loans 32.4% 35.9% In our opinion, the allowance for loan losses was reasonable in relation to the risk in our loan portfolio at June 30, 2017. RESULTS OF OPERATIONS Profitability Information (dollars in thousands) For the six months ended June 30 2017 2016 Net income $ 148,000 $ 152,572 Return on average assets 1.3% 1.4% Return on average members' equity 7.0% 7.7% Changes in the chart above relate directly to: Changes in income discussed below Changes in assets discussed in the Loan Portfolio section Changes in capital discussed in the Funding, Liquidity, and Capital section 2

Changes in Significant Components of Net Income Increase (decrease) in For the six months ended June 30 2017 2016 net income Net interest income * $ 230,817 $ 219,432 $ 11,385 Provision for credit losses 27,564 14,890 (12,674) Patronage income 33,930 35,426 (1,496) Other income, net (excluding patronage income) 16,823 23,473 (6,650) Operating expenses 110,503 111,876 1,373 Benefit from income taxes (4,497) (1,007) 3,490 Net income $ 148,000 $ 152,572 $ (4,572) The increase in the provision for credit losses was related to the challenging agricultural environment and declined credit quality. The decrease in other income was primarily due to losses recognized during the first quarter of 2017 related to write-downs of assets held for lease related to certain lease accounts, and lower fee income. Operating expenses decreased in 2017 primarily due to a lower premium rate charged by the Farm Credit System Insurance Corporation (FCSIC) on accrual loans from 16 basis points for the first half of 2016 to 15 basis points in 2017.The FCSIC Board meets periodically throughout the year to review premium rates and has the ability to change the rates at any time. The change in benefit from income taxes was primarily related to lower taxable income attributable to our taxable entity, as a result of the patronage distribution accrual considered for tax purposes. * The changes in net interest income are shown below. Changes in Net Interest Income For the six months ended June 30 2017 vs 2016 Changes in volume $ 4,658 Changes in interest rates 6,876 Changes in non-accrual income and other (149) Net change $ 11,385 FUNDING, LIQUIDITY, AND CAPITAL Our note payable matured on April 30, 2017, and was renewed for $23.2 billion with a maturity date of April 30, 2020. The note payable will be renegotiated no later than the maturity date. The repricing attributes of our line of credit generally correspond to the repricing attributes of our loan portfolio which significantly reduces our market interest rate risk. Due to the cooperative structure of the Farm Credit System and as we are a stockholder of AgriBank, we expect this borrowing relationship to continue into the foreseeable future. Our other source of lendable funds is from unallocated surplus. The components of cost of funds associated with our note payable include: A marginal cost of debt component A spread component, which includes cost of servicing, cost of liquidity, and bank profit A risk premium component, if applicable We were not subject to a risk premium at June 30, 2017, or December 31, 2016. Total members equity increased $126.7 million from December 31, 2016, primarily due to net income for the period partially offset by patronage distribution accruals. Farm Credit Administration (FCA) regulations require us to maintain minimums for various regulatory capital ratios. New regulations became effective January 1, 2017, which replaced the previously required core surplus and total surplus ratios with common equity tier 1, tier 1 capital, and total capital riskbased capital ratios. The new regulations also added tier 1 leverage and unallocated retained earnings and equivalents ratios. The permanent capital ratio continues to remain in effect, with some modifications to align with the new regulations. The capital adequacy ratios are directly impacted by the changes in capital as more fully explained in this section and the changes in assets as discussed in the Loan Portfolio section. Refer to Note 6 of the accompanying Consolidated Financial Statements for additional detail regarding the capital ratios effective as of June 30, 2017. Refer to Note 9 in our 2016 Annual Report for a more complete description of the ratios effective as of December 31, 2016. 3

RELATIONSHIP WITH AGRIBANK Patronage AgriBank has amended its capital plan effective July 1, 2017, to provide for adequate capital at AgriBank under the new capital regulations as well as to create a path to long-term capital optimization within the AgriBank District. The plan optimizes capital at AgriBank; distributing available AgriBank earnings in the form of patronage, either cash or stock. A key part of these changes involves maintaining capital adequacy such that sufficient earnings will be retained in the form of unallocated retained earnings and allocated stock to meet the leverage ratio target and other regulatory or policy constraints prior to any cash patronage distributions. Purchased Services During 2016, District Associations and AgriBank conducted research related to the creation of a separate service entity to provide many of the business services offered by AgriBank. A separate service entity allows District Associations and AgriBank to develop and maintain long-term, cost effective technology and business services. The service entity would be owned by certain District Associations and AgriBank. An application to form the service entity was submitted to the FCA for approval in May 2017. CERTIFICATION The undersigned have reviewed the June 30, 2017, Quarterly Report of Farm Credit Mid-America, ACA, which has been prepared under the oversight of the Audit Committee and in accordance with all applicable statutory or regulatory requirements. The information contained herein is true, accurate, and complete to the best of our knowledge and belief. Andrew Wilson Chair of the Board Farm Credit Mid-America, ACA William L. Johnson President and Chief Executive Officer Farm Credit Mid-America, ACA Daniel Wagner Executive Vice President - Chief Financial & Information Officer Farm Credit Mid-America, ACA August 9, 2017 4

CONSOLIDATED STATEMENTS OF CONDITION Farm Credit Mid-America, ACA (Unaudited) June 30 December 31 As of: 2017 2016 ASSETS Loans $ 20,298,349 $ 20,475,014 Allowance for loan losses 114,268 94,746 Net loans 20,184,081 20,380,268 Investment in AgriBank, FCB 441,703 441,703 Investment securities 1,197,662 1,195,681 Accrued interest receivable 159,414 167,642 Other property owned 4,639 6,483 Assets held for lease, net 210,911 234,492 Other assets 183,205 185,683 Total assets $ 22,381,615 $ 22,611,952 LIABILITIES Note payable to AgriBank, FCB $ 17,840,450 $ 18,148,415 Accrued interest payable 98,413 95,499 Deferred tax liabilities, net 63,592 78,833 Patronage distribution payable 22,023 30,026 Other liabilities 57,880 86,577 Total liabilities 18,082,358 18,439,350 Contingencies and commitments (Note 7) MEMBERS' EQUITY Capital stock and participation certificates 82,994 84,561 Unallocated surplus 4,216,263 4,088,041 Total members' equity 4,299,257 4,172,602 Total liabilities and members' equity $ 22,381,615 $ 22,611,952 The accompanying notes are an integral part of these Consolidated Financial Statements. 5

CONSOLIDATED STATEMENTS OF INCOME Farm Credit Mid-America, ACA (Unaudited) Three Months Ended Six Months Ended For the period ended June 30 2017 2016 2017 2016 Interest income $ 214,058 $ 207,366 $ 423,406 $ 411,234 Interest expense 98,441 96,271 192,589 191,802 Net interest income 115,617 111,095 230,817 219,432 Provision for credit losses 25,681 13,253 27,564 14,890 Net interest income after provision for credit losses 89,936 97,842 203,253 204,542 Other income Patronage income 16,744 17,730 33,930 35,426 Financially related services income 411 301 1,230 978 Fee income 7,479 9,345 14,776 17,580 Operating lease income, net 2,047 2,562 2,027 5,225 Other property owned losses, net (272) (454) (2,048) (553) Miscellaneous income, net (96) (135) 838 243 Total other income 26,313 29,349 50,753 58,899 Operating expenses Salaries and employee benefits 35,382 33,996 68,852 67,966 Other operating expenses 21,087 22,973 41,651 43,910 Total operating expenses 56,469 56,969 110,503 111,876 Income before income taxes 59,780 70,222 143,503 151,565 Benefit from income taxes (3,396) (2,271) (4,497) (1,007) Net income $ 63,176 $ 72,493 $ 148,000 $ 152,572 The accompanying notes are an integral part of these Consolidated Financial Statements. 6

CONSOLIDATED STATEMENTS OF CHANGES IN MEMBERS EQUITY Farm Credit Mid-America, ACA (Unaudited) Capital Stock and Total Participation Unallocated Members' Certificates Surplus Equity Balance at December 31, 2015 $ 86,504 $ 3,817,835 $ 3,904,339 Net income -- 152,572 152,572 Unallocated surplus designated for patronage distributions -- (15,122) (15,122) Capital stock and participation certificates issued 2,456 -- 2,456 Capital stock and participation certificates retired (3,067) -- (3,067) Balance at June 30, 2016 $ 85,893 $ 3,955,285 $ 4,041,178 Balance at December 31, 2016 $ 84,561 $ 4,088,041 $ 4,172,602 Net income -- 148,000 148,000 Unallocated surplus designated for patronage distributions -- (19,778) (19,778) Capital stock and participation certificates issued 1,801 -- 1,801 Capital stock and participation certificates retired (3,368) -- (3,368) Balance at June 30, 2017 $ 82,994 $ 4,216,263 $ 4,299,257 The accompanying notes are an integral part of these Consolidated Financial Statements. 7

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 1: ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES The Consolidated Financial Statements contain all adjustments necessary for a fair presentation of the interim consolidated financial condition and consolidated results of operations. Our accounting policies conform to accounting principles generally accepted in the United States of America (GAAP) and the prevailing practices within the financial services industry. This interim Quarterly Report is prepared based upon statutory and regulatory requirements and in accordance with GAAP. However, certain disclosures required by GAAP are omitted. The results of the six months ended June 30, 2017, are not necessarily indicative of the results to be expected for the year ending December 31, 2017. The interim financial statements and the related notes in this Quarterly Report should be read in conjunction with the Consolidated Financial Statements and related notes included in our Annual Report for the year ended December 31, 2016 (2016 Annual Report). The Consolidated Financial Statements present the consolidated financial results of Farm Credit Mid-America, ACA and its subsidiaries Farm Credit Mid-America, FLCA and Farm Credit Mid-America, PCA (the subsidiaries). All material intercompany transactions and balances have been eliminated in consolidation. Recently Issued or Adopted Accounting Pronouncements We have assessed the potential impact of accounting standards that have been issued by the Financial Accounting Standards Board (FASB) and have determined the following standards to be applicable to our business: Standard Description Effective date and financial statement impact In June 2016, the FASB issued Accounting Standards Update (ASU) 2016-13 Financial Instruments Credit Losses. In February 2016, the FASB issued ASU 2016-02 Leases. In January 2016, the FASB issued ASU 2016-01 Recognition and Measurement of Financial Assets and Financial Liabilities. The guidance replaces the current incurred loss impairment methodology with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. Credit losses relating to available-forsale securities would also be recorded through an allowance for credit losses. The guidance modifies the recognition and accounting for lessees and lessors and requires expanded disclosures regarding assumptions used to recognize revenue and expenses related to leases. The guidance is intended to enhance the reporting model for financial instruments to provide users of financial statements with more decision-useful information. The amendments address certain aspects of recognition, measurement, presentation, and disclosure of financial statements. The guidance is effective for nonpublic entities for annual reporting periods beginning after December 15, 2020, and interim periods within annual periods beginning after December 15, 2021. Early adoption is permitted as of annual reporting periods beginning after December 15, 2018, including interim periods within those annual periods. We are currently evaluating the impact of the guidance on our financial condition, results of operations, cash flows, and financial statement disclosures. The guidance is effective for nonpublic entities for annual reporting periods beginning after December 15, 2019, and interim periods the subsequent year. Early adoption is permitted and modified retrospective adoption is required. We are currently evaluating the impact of the guidance on our financial condition, results of operations, cash flows, and financial statement disclosures. The guidance is effective for nonpublic entities for annual reporting periods beginning after December 15, 2018, and interim periods with annual periods beginning after December 15, 2019. Certain disclosure changes are permitted to be immediately adopted for annual reporting periods that have not yet been made available for issuance. Nonpublic entities are no longer required to include certain fair value of financial instruments disclosures as part of these disclosure changes. We have immediately adopted this guidance and have excluded such disclosures from our Notes to Consolidated Financial Statements. Early adoption is permitted for interim and annual reporting periods beginning after December 15, 2017, for other applicable sections of the guidance. We are currently evaluating the impact of the remaining guidance on our financial condition, results of operations, cash flows, and financial statement disclosures. 8

Standard Description Effective date and financial statement impact In May 2014, the FASB issued ASU 2014-09 Revenue from Contracts with Customers." NOTE 2: LOANS AND ALLOWANCE FOR LOAN LOSSES The guidance governs revenue recognition from contracts with customers and requires an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Financial instruments and other contractual rights within the scope of other guidance issued by the FASB are excluded from the scope of this new revenue recognition guidance. In this regard, a majority of our contracts would be excluded from the scope of this new guidance. The guidance is effective for nonpublic entities for annual reporting periods beginning after December 15, 2017, and interim periods within annual periods beginning after December 15, 2018. In March 2016, the FASB issued ASUs 2016-08 and 2016-10, which provided further clarifying guidance on the previously issued standard. We are in the process of reviewing contracts to determine the effect, if any, on our financial condition and results of operations. Loans by Type (dollars in thousands) As of: June 30, 2017 December 31, 2016 Amount % Amount % Real estate mortgage $ 13,972,063 68.8% $ 14,030,873 68.6% Production and intermediate term 3,504,534 17.3% 3,582,878 17.5% Agribusiness 1,486,975 7.3% 1,457,640 7.1% Rural residential real estate 950,361 4.7% 985,986 4.8% Finance leases and other 384,416 1.9% 417,637 2.0% Total $ 20,298,349 100.0% $ 20,475,014 100.0% The finance leases and other category is primarily comprised of finance leases, communication, international, and energy related loans as well as certain assets originated under our mission related investment authority. Delinquency Aging Analysis of Loans 30-89 90 Days Not Past Due 90 Days or Days or More Total or Less than 30 More Past Due As of June 30, 2017 Past Due Past Due Past Due Days Past Due Total and Accruing Real estate mortgage $ 43,688 $ 55,166 $ 98,854 $ 13,980,647 $ 14,079,501 $ 1,820 Production and intermediate term 22,224 21,841 44,065 3,497,351 3,541,416 -- Agribusiness 17,488 61 17,549 1,474,966 1,492,515 -- Rural residential real estate 8,502 4,107 12,609 940,366 952,975 -- Finance leases and other 495 2,147 2,642 381,944 384,586 -- Total $ 92,397 $ 83,322 $ 175,719 $ 20,275,274 $ 20,450,993 $ 1,820 30-89 90 Days Not Past Due 90 Days or Days or More Total or Less than 30 More Past Due As of December 31, 2016 Past Due Past Due Past Due Days Past Due Total and Accruing Real estate mortgage $ 45,637 $ 26,441 $ 72,078 $ 14,067,927 $ 14,140,005 $ -- Production and intermediate term 19,429 15,802 35,231 3,590,772 3,626,003 283 Agribusiness 4,078 -- 4,078 1,459,408 1,463,486 -- Rural residential real estate 10,587 5,176 15,763 972,857 988,620 -- Finance leases and other 277 440 717 417,086 417,803 -- Total $ 80,008 $ 47,859 $ 127,867 $ 20,508,050 $ 20,635,917 $ 283 Note: Accruing loans include accrued interest receivable. 9

Risk Loans Risk loans are loans for which it is probable that all principal and interest will not be collected according to the contractual terms. Risk Loan Information June 30 December 31 As of: 2017 2016 Volume with specific allowance $ 49,150 $ 19,891 Volume without specific allowance 303,440 243,927 Total risk loans $ 352,590 $ 263,818 Total specific allowance $ 17,147 $ 6,023 For the six months ended June 30 2017 2016 Income on accrual risk loans $ 413 $ 382 Income on non-accrual loans 6,147 6,296 Total income on risk loans $ 6,560 $ 6,678 Average risk loans $ 322,352 $ 232,543 Note: Accruing loans include accrued interest receivable. We did not have any material commitments to lend additional money to borrowers whose loans were at risk at June 30, 2017. Troubled Debt Restructurings (TDRs) In situations where, for economic or legal reasons related to the borrower s financial difficulties, we grant a concession for other than an insignificant period of time to the borrower that we would not otherwise consider, the related loan is classified as a troubled debt restructuring, also known as a restructured loan. A concession is generally granted in order to minimize economic loss and avoid foreclosure. Concessions vary by program and borrower and may include interest rate reductions, term extensions, payment deferrals, or an acceptance of additional collateral in lieu of payments. In limited circumstances, principal may be forgiven. Loans classified as TDRs are considered risk loans. All risk loans are analyzed within our allowance for loan losses. We record a specific allowance to reduce the carrying amount of the restructured loan to the lower of book value or net realizable value of collateral. TDR Activity Six months ended June 30 2017 2016 Pre-modification Post-modification Pre-modification Post-modification Real estate mortgage $ 504 $ 447 $ 455 $ 454 Production and intermediate term 702 706 1,112 1,115 Rural residential real estate 4 3 249 249 Total $ 1,210 $ 1,156 $ 1,816 $ 1,818 Pre-modification represents the outstanding recorded investment of the loan just prior to restructuring and post-modification represents the outstanding recorded investment of the loan immediately following the restructuring. The recorded investment of the loan is the unpaid principal amount of the receivable increased or decreased by applicable accrued interest and unamortized premium, discount, finance charges, and acquisition costs and may also reflect a previous direct charge-off. The primary types of modification included interest rate reduction below market, forgiveness of interest and extension of maturity. TDRs that Occurred Within the Previous 12 Months that Subsequently Defaulted During the Six Months Ended June 30 2017 2016 Real estate mortgage $ 67 $ 164 Production and intermediate term 19 20 Total $ 86 $ 184 10

TDRs Outstanding June 30 December 31 As of: 2017 2016 Accrual status: Real estate mortgage $ 14,849 $ 14,956 Production and intermediate term 1,513 832 Agribusiness -- 13 Rural residential real estate 1,332 1,278 Total TDRs in accrual status $ 17,694 $ 17,079 Non-accrual status: Real estate mortgage $ 9,125 $ 9,897 Production and intermediate term 4,213 6,684 Agribusiness -- -- Rural residential real estate 1,224 1,298 Total TDRs in non-accrual status $ 14,562 $ 17,879 Total TDRs: Real estate mortgage $ 23,974 $ 24,853 Production and intermediate term 5,726 7,516 Agribusiness -- 13 Rural residential real estate 2,556 2,576 Total TDRs $ 32,256 $ 34,958 There were no material commitments to lend to borrowers whose loans have been modified in a TDR at June 30, 2017. Allowance for Loan Losses Changes for Allowance for Loan Losses Six months ended June 30 2017 2016 Balance at beginning of period $ 94,746 $ 62,881 Provision for loan losses 27,440 14,234 Loan recoveries 2,319 2,443 Loan charge-offs (10,237) (3,588) Balance at end of period $ 114,268 $ 75,970 The Provision for credit losses in the Consolidated Statements of Income includes a provision for loan losses as presented in the previous chart, as well as a provision for credit losses on unfunded commitments. The accrued credit losses on unfunded commitments are recorded in Other liabilities in the Consolidated Statements of Condition. Credit Loss Information on Unfunded Commitments For the six months ended June 30 2017 2016 Provision for credit losses $ 124 $ 656 June 30 December 31 As of: 2017 2016 Accrued credit losses $ 8,674 $ 8,550 11

NOTE 3: INVESTMENT IN AGRIBANK, FCB Effective July 1, 2017, we were required by AgriBank to maintain an investment equal to 2.25% of the average quarterly balance of our note payable, with an additional amount required on Association growth in excess of a targeted growth rate, if the District is also growing above a targeted growth rate. From January 1 to June 30, 2017, we were required by AgriBank to maintain an investment equal to 2.25% of the average quarterly balance of our note payable, with an additional amount required on growth in excess of a sustainable growth rate. Previously, the required investment was equal to 2.25% of the average quarterly balance of our note payable to AgriBank plus an additional 1.0% on growth that exceeded a targeted rate. Investment in AgriBank June 30 December 31 As of: 2017 2016 Required stock investment $ 435,107 $ 441,703 Purchased excess stock investment 6,596 -- Total investment $ 441,703 $ 441,703 NOTE 4: INVESTMENT SECURITIES We held investment securities of $1.2 billion at June 30, 2017, and $1.2 billion at December 31, 2016. Our investment securities consisted of: Securities containing loans guaranteed by the Small Business Administration (SBA) Investment securities made up of Farm Service Agency securities (FSA) Securities issued by the United States Department of Agriculture (USDA) All of our investment securities, except for $7.4 million at June 30, 2017 and $7.6 million at December 31, 2016 were fully guaranteed by the SBA, FSA, or USDA. The investment securities have been classified as held-to-maturity. The investment portfolio is evaluated for other-than-temporary impairment. To date, we have not recognized any impairment on our investment portfolio. Our investments are either mortgage-backed securities (MBS), which are generally longer-term investments, or asset-backed securities (ABS), which are generally shorter-term investments. SBA, FSA, and USDA guaranteed investments may be comprised of either MBS or ABS. Additional Investment Securities Information Weighted (dollars in thousands) Average Amortized Unrealized Unrealized Fair As of June 30, 2017 Yield Cost Gains Losses Value MBS 2.9% $ 1,005,847 $ 981 $ 37,378 $ 969,450 ABS 2.4% 191,815 11 10,362 181,464 Total 2.8% $ 1,197,662 $ 992 $ 47,740 $ 1,150,914 Weighted Average Amortized Unrealized Unrealized Fair As of December 31, 2016 Yield Cost Gains Losses Value MBS 2.6% $ 1,010,764 $ 4,723 $ 37,183 $ 978,304 ABS 2.1% 184,917 1,084 9,885 176,116 Total 2.5% $ 1,195,681 $ 5,807 $ 47,068 $ 1,154,420 Investment income is recorded in Interest income in the Consolidated Statements of Income and totaled $15.4 million and $13.7 million for the six months ended June 30, 2017, and 2016, respectively. Contractual Maturities of Investment Securities As of June 30, 2017 Amortized Cost Less than one year $ 894 One to five years 46,328 Five to ten years 112,334 More than ten years 1,038,106 Total $ 1,197,662 12

A summary of investments in an unrealized loss position presented by the length of time the investments have been in continuous unrealized loss position follows: Less than 12 months Greater than 12 months Unrealized Unrealized As of June 30, 2017 Fair Value Losses Fair Value Losses MBS $ 179,332 $ 13,074 $ 486,496 $ 24,304 ABS 47,449 2,856 105,783 7,506 Total $ 226,781 $ 15,930 $ 592,279 $ 31,810 Unrealized losses associated with investment securities are not considered to be other-than-temporary due to the 100% guarantee of the principal by the U.S. government. However, the premiums paid to purchase the investment are not guaranteed and are amortized over the weighted average maturity of each loan as a reduction of interest income. Repayment of principal is assessed at least quarterly, and any remaining unamortized premium is taken as a reduction to interest income if principal repayment is unlikely, or when a demand for payment is made for the guarantee. At June 30, 2017, the majority of the $47.7 million unrealized loss represents unamortized premium. NOTE 5: OTHER INVESTMENTS We and other Farm Credit Institutions are among the limited partners for a $154.5 million Rural Business Investment Company (RBIC), Advantage Capital Agribusiness Partners, L.P., established in October 2014. The RBIC facilitates equity and debt investments in agriculture-related businesses that create growth and job opportunities in rural America. Our total commitment is $20.0 million through October 2019. Our investment in the RBIC is recorded in Other assets in the Consolidated Statements of Condition, and totaled $10.8 million at June 30, 2017, and $7.5 million at December 31, 2016. We and other Farm Credit Institutions are among the limited partners for a $31.3 million RBIC. Innova Ag Innovation Fund IV, L.P., established in April 2017. Our total commitment is $5.0 million, which ends on the fourth anniversary of the initial closing date, unless extended to the fifth anniversary. Our investment in the RBIC is recorded in Other assets in the Consolidated Statements of Condition, and totaled $113 thousand at June 30, 2017. The investments were evaluated for impairment. To date, we have not recognized any impairment on these investments. NOTE 6: MEMBERS EQUITY Regulatory Capitalization Requirements Select Capital Ratios Capital As of Regulatory Conservation June 30, 2017 Minimums Buffer Total Risk-adjusted: Common equity tier 1 ratio 19.0% 4.5% 2.5%* 7.0% Tier 1 capital ratio 19.0% 6.0% 2.5%* 8.5% Total capital ratio 19.5% 8.0% 2.5%* 10.5% Permanent capital ratio 19.0% 7.0% 0.0% 7.0% Non-risk-adjusted: Tier 1 leverage ratio 17.7% 4.0% 1.0% 5.0% Unallocated retained earnings and equivalents leverage ratio 17.7% 1.5% 0.0% 1.5% *The 2.5% capital conservation buffer over risk-adjusted ratio minimums will be phased in over three years under the FCA capital requirements. Effective January 1, 2017, the regulatory capital requirements for Farm Credit System Banks and associations were modified. The new regulations replaced existing core surplus and total surplus ratios with common equity tier 1, tier 1 capital, and total capital risk-based capital ratios. The new regulations also added a tier 1 leverage ratio and an unallocated retained earnings equivalents (UREE) leverage ratio. The permanent capital ratio continues to remain in effect, with some modifications, to align with the new regulations. Risk-adjusted assets have been defined by Farm Credit Administration (FCA) Regulations as the Statement of Condition assets and off-balance-sheet commitments adjusted by various percentages, depending on the level of risk inherent in the various types of assets. The primary changes, which generally have the impact of increasing risk-adjusted assets (decreasing risk-based regulatory capital ratios) were as follows: Inclusion of off-balance-sheet commitments with terms at origination of less than 14 months Increased risk-weighting of most loans 90 days past due or in non-accrual status Risk-adjusted assets is calculated differently for the permanent capital ratio (referred herein as PCR risk-adjusted assets) compared to the other risk-based capital ratios. The primary difference is the inclusion of the allowance for loan losses as a deduction to risk-adjusted assets for the permanent capital ratio. 13

These ratios are based on a three-month average daily balance in accordance with FCA Regulations and are calculated as follows (not all items below may be applicable to our Association): Common equity tier 1 ratio is statutory minimum purchased member stock, other required member stock held for a minimum of 7 years, allocated equities held for a minimum of 7 years or not subject to retirement, unallocated retained earnings, paid-in capital, less certain regulatory required deductions including the amount of allocated investments in other System institutions, and the amount of purchased investments in other System institutions under the corresponding deduction approach, divided by average risk-adjusted assets. Tier 1 capital ratio is common equity tier 1 plus non-cumulative perpetual preferred stock, divided by average risk-adjusted assets. Total capital is tier 1 capital plus other required member stock held for a minimum of 5 years, allocated equities held for a minimum of 5 years, subordinated debt, and limited-life preferred stock greater than 5 years to maturity at issuance subject to certain limitations, allowance for loan losses and reserve for credit losses subject to certain limitations, less certain investments in other System institutions under the corresponding deduction approach, divided by average risk-adjusted assets. Permanent capital ratio is all at-risk borrower stock, any allocated excess stock, unallocated retained earnings, paid-in capital, subordinated debt, and preferred stock subject to certain limitations, less certain allocated and purchased investments in other System institutions divided by PCR risk-adjusted assets. Tier 1 leverage ratio is tier 1 capital, including regulatory deductions, divided by average assets less regulatory deductions subject to tier 1 capital. UREE leverage ratio is unallocated retained earnings, paid-in capital, allocated surplus not subject to retirement less certain regulatory required deductions including the amount of allocated investments in other System institutions divided by average assets less regulatory deductions subject to tier 1 capital. If the capital ratios fall below the total requirements, including the buffer amounts, capital distributions (equity redemptions, dividends, and patronage) and discretionary senior executive bonuses are restricted or prohibited without prior FCA approval. Effective January 1, 2017, the regulatory capital requirements allow for allotment agreements for only the permanent capital ratio and, as such, any stock in excess of our AgriBank required investment was not included in the common equity tier 1, tier 1 capital, total capital, or leverage ratios. We had no allocated excess stock at June 30, 2017, or December 31, 2016. Refer to Note 9 in our 2016 Annual Report for a more complete description of the ratios effective as of December 31, 2016. NOTE 7: CONTINGENCIES AND COMMITMENTS In the normal course of business, we have various contingent liabilities and commitments outstanding, primarily commitments to extend credit, which may not be reflected in the Consolidated Financial Statements. We do not anticipate any material losses because of these contingencies or commitments. We may be named as a defendant in certain lawsuits or legal actions in the normal course of business. At the date of these Consolidated Financial Statements, our management team was not aware of any material actions. However, management cannot ensure that such actions or other contingencies will not arise in the future. 14

NOTE 8: FAIR VALUE MEASUREMENTS Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date in the principal or most advantageous market for the asset or liability. Accounting guidance also establishes a fair value hierarchy, with three levels of inputs that may be used to measure fair value. Refer to Note 2 in our 2016 Annual Report for a more complete description of the three input levels. We did not have any assets or liabilities measured at fair value on a recurring basis at June 30, 2017, or December 31, 2016. Non-Recurring We may be required, from time to time, to measure certain assets at fair value on a non-recurring basis. Assets Measured at Fair Value on a Non-recurring Basis Six months ended As of June 30, 2017 June 30, 2017 Fair Value Measurement Using Total Fair Level 1 Level 2 Level 3 Value Total (Losses) Impaired loans $ -- $ 33,603 $ -- $ 33,603 $ (21,361) Other property owned -- -- 4,825 4,825 (1,878) Six months ended As of December 31, 2016 June 30, 2016 Fair Value Measurement Using Total Fair Level 1 Level 2 Level 3 Value Total (Losses) Impaired loans $ -- $ 14,561 $ -- $ 14,561 $ (6,546) Other property owned -- -- 6,742 6,742 (408) Valuation Techniques Impaired loans: Represents the carrying amount and related write-downs of loans which were evaluated for individual impairment based on the appraised value of the underlying collateral. When the value of the collateral, less estimated costs to sell, is less than the principal balance of the loan, a specific reserve is established. Costs to sell represent transaction costs and are not included as a component of the asset s fair value. If the process uses independent appraisals and other market-based information, they are classified as Level 2. If the process requires significant input based on management s knowledge of and judgment about current market conditions, specific issues relating to the collateral and other matters, they are classified as Level 3. Other property owned: Represents the fair value and related losses of foreclosed assets that were measured at fair value based on the collateral value, which is generally determined using appraisals, or other indications based on sales of similar properties. Costs to sell represent transaction costs and are not included as a component of the asset s fair value. If the process uses independent appraisals and other market-based information, they are classified as Level 2. If the process requires significant input based on management s knowledge of and judgment about current market conditions, specific issues relating to the property and other matters, they are classified as Level 3. NOTE 9: SUBSEQUENT EVENTS We have evaluated subsequent events through August 9, 2017, which is the date the Consolidated Financial Statements were available to be issued. There have been no material subsequent events that would require recognition in our Quarterly Report or disclosure in the Notes to Consolidated Financial Statements. 15